COMMISSIONER OF INCOME TAX Vs. USHARANI BHATIA

JUDGEMENT

(1.) BY this reference under section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), the Income -tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

(2.) THE material facts giving rise to this reference, briefly, are as follows : While framing the assessment for the assessment year 1978 -79, the assessee was called upon to show the source of 100 high denomination notes of Rs. 1,000 represented by the assessee to the State Bank of India. As the Income -tax Officer was not satisfied with the explanation furnished by the assessee, the Income -tax proposed an addition of Rs. 1,00,000 to the income of the assessee and referred the matter to the Inspecting Assistant Commissioner under section 144B of the Act. The Inspecting Assistant Commissioner was satisfied with the explanation furnished the assessee and the Inspecting Assistant Commissioner accordingly directed the Income -tax Officer to delete the proposed addition. The Income -tax Officer thereafter farmed the assessment order in compliance with the direction given by the Inspecting Assistant Commissioner. Subsequently, the Commissioner of Income -tax, exercising powers under section 263 of the Act, held that the order passed by the Income -tax Officer in pursuance of the direction given by the Inspecting Assistant Commissioner was prejudicial to the interest of the Revenue inasmuch as proper enquiries had not been made with regard to the genuineness of the source of the high denomination notes. The Commissioner of Income -tax, therefore, set aside the order of assessment and directed the Income -tax Officer to make fresh assessment in the light of the direction given by the Commissioner of Income -tax. Aggrieved by the order passed by the Commissioner, the assessee filed an appeal before the Tribunal. The Tribunal held that the Commissioner had no jurisdiction to intere with the assessment order passed by the Income -tax Officer in compliance with the direction given by the Inspecting Assistant Commissioner. The Tribunal, therefore, allowed the appeal. Aggrieved by the order passed by the Tribunal, the Revenue sought reference and it is at the instance of the Revenue that the aforesaid question of law has been referred to this court for its opinion.

(3.) FOR all these reasons, our answer to the question referred to this court is in the negative and against the assessee. In the circumstances of the case, parties shall bear their own costs of this reference.